press release results first half 2019 · under pressure from yellow-vest protesters, the ... 12.3%...

PRESS RELEASE RESULTS FIRST HALF 2019JULY 26, 2019

Direct result € 65.8m (H1 2018: € 59.7 from continuing operations)EPRA EPS € 1.44 (H1 2018: € 1.33 from continuing operations)Netherlands and Belgium solid performance, France challengingIndirect result € -125.1m (H1 2018: € -29.3m from continuing operations)Outlook: EPRA EPS 2019 between € 2.75 - € 2.80 (€ 2.75 – € 2.85)Dividend 2019 unchanged at € 2.52, or € 0.63 per quarter

OUR MARKETS

THE NETHERLANDSA continued strong housing market has resulted ingood turnover growth in the DIY, furniture andhousehold goods segments. Retail sales in generalare still showing decent growth, but this does notmean that the pressure on retailer margins isdecreasing. The fashion segment continues tostruggle, whilst supermarkets and food andbeverage are still expanding. The number of retailerbankruptcies increased year-on-year, often resultingin a restart, which puts pressure on rents.

BELGIUMAs a result of increased spending power, privateconsumption in Belgium is expected to increase bysome 1.2% in 2019. However, the retail market islacklustre, which is particularly felt in peripheralareas and B-quality high streets. High-qualitylocations can still rely on a healthy demand fromretailers, albeit larger floor-plates are less indemand. Where fashion operators take more time intheir decision making and have a cautious stance,others are stepping in. Demand is strong fromexpanding food & beverage operators, opticalchains, medical operators and services. As goodquality locations are scarce, these retailers acceptrent levels above ERV.

FRANCEThe French economic growth is stable at some 1.2%.Under pressure from yellow-vest protesters, thegovernment announced plans to improve privatespending power by reducing taxes. Privateconsumption picked up during the first half.However, demand from retailers to expand is lowand the leasing process is protracted due to theircautious decision making. Demand is mainly comingfrom food & beverage, sports and health & beautysegments. Current rental levels are facing downwardpressure. Mixed-use alternatives that are interestedin opening on high footfall locations are becomingmore active, such as co-working spaces, healthcare& medical and services.

2PRESS RELEASE Half-year results 2019 Wereldhave N.V.

OPERATIONS

Like-for-like rental growth shopping centresat 0.8% (indexation 1.7%).

•

Occupancy rate of shopping centres at95.6% (YE 2018: 96.3%)

•

Q2 shows improving occupancy in theNetherlands and Belgium compared to Q1,decreasing in France

•

Increase in YTD footfall of 1.0% from 62.9mto 63.5m

•

Occupancy increased during the second quarter inBelgium (+0.4%) and the Netherlands (+0.2%). InFrance, occupancy decreased by 0.2%. At June 30,2019, average occupancy stood at 95.6%, against95.5% at the end of the first quarter (YE 2018:96.3%).

Like-for-like rental growth of the shopping centrescame out at 0.8%, with the indexation at 1.7%.

THE NETHERLANDSIn the Netherlands, occupancy stood at 97.2% at theend of the second quarter, against 97.0% at theprevious quarter (YE 2018: 97.1%). Leasing activityand retailer expansion was the largest in the food& convenience segment. Six supermarket contractswere signed during the first half totaling 17,000 sqmwith rents at or above ERV levels. The deal underpinsthe consistent demand from food & grocery retailers,and five of these transactions include an expansion.Lease levels were in line with market rents and rentalcontracts are typically for a ten-year’s term.

A package deal was agreed with H&M for all their7 units in our centres, taking effect in 2020 and 2021.Meanwhile, the mixed-use approach to replacestruggling fashion retailers is making progress.A good first step was the lease of Basic Fit inPresikhaaf, Arnhem. Wereldhave aims to furtherincrease the health sector presence in the centre.

Most of the bankruptcies that occurred during thefirst half of the year have already been dealt with. AllIntertoys’ stores have been leased out again, and theOp=Op Voordeelshop and Sissy Boy units in ourcentres will be continued. Like-for-like rental growthcame out at a solid +1.5%, which is 0.2% above theindexation. The bankruptcy of 6 CoolCat units hadlimited impact on rental growth in the first half of theyear. Commercialisation of these units is in progress.

Footfall in our Dutch centres saw a healthy increase,particularly in De Koperwiek in Capelle aan denIJssel (+9%) and the Pieter Vreedeplein in Tilburg(+11%). Overall, footfall increased by 1.1%, which is1.7% above the market average.

City Plaza, Nieuwegein


BELGIUMIn Belgium, occupancy of the shopping centresimproved from 95.8% at the end of Q1 to 96.2% atJune 30, 2019 (year-end 2018: 97.2%). Theoccupancy of the Belgian offices improved from90.6% at year-end 2018 to 92.6% at June 30, 2019.Like-for-like rental growth during H1 2019 was 1.9%.

The bankruptcy of CoolCat impacted occupancy offour units, but this was more than compensated bythe good progress in letting of the former Carrefourunit in Belle-Île, Liège. The 5,500 sqm that werevacated by the Carrefour hypermarket are nowalmost fully let, with large new anchor tenants asAction, Decathlon and Medi-Market. Good progressis also made in Shopping 1 in Genk. The occupancypassed the 90% mark, but as the Carrefour is not yetentirely relet, occupancy in Shopping 1 is likely todrop in Q3 when the Carrefour unit will becomepartially empty. Albert Heijn and Medi-Marketsigned leases for the unit and The Fashion Store willopen a 1,000 sqm shop in Genk. Eyes+more signedleases for the shopping centres in Genk, Nivelles andLiège.

Footfall increased by 4.4%, whilst the marketaverage was 1.7% down. All shopping centres sawa positive development of footfall, with theexception of Belle-Île in Liege, where footfalldeclined by 4.7%. This can be fully attributed to theannouncement by Carrefour to decrease its footprintand by the subsequent works to change the lay-outfor new tenants.

River Woods, Kortrijk, Belgium

OPERATIONS


FRANCEIn France, leasing was slow during the first half of2019. Like-for-like rental growth in France during thefirst half amounted to -1.5%. Tenant bankruptcieswere still relatively low, but retailers in severalsegments continue to struggle. Occupancydecreased from 92.2% at the end of the first quarterto 92.0% at June 30, 2019 (year-end 2018: 94.0%).Package deals were signed with Promod (Docks76 and Docks Vauban), Jules (Rivetoile, DocksVauban and Docks 76) and Histoire d’Or (Docks76 and Saint Sever). The Saint Sever shopping centrein Rouen benefits from the opening of the Verrerieproject, a food hall in front of the cinema. Sales wereslow during the first quarter but picked up from Mayonwards. The development of sales is positive inDocks Vauban and Saint Sever and negative in theother centres. Overall, sales levels are still some3.6% below the previous year. H&M, JD Sports,Stradivarius, Mango, KIABI and Promod are the topperforming retailers in Wereldhave’s Frenchportfolio.

Footfall in the French shopping centres decreasedby 0.4%. All centres recorded higher visitornumbers, with the exception of Mériadeck andDocks Vauban. Continuing Saturday yellow vestprotests caused a 8.6% drop in visitor numbers inthis centre. On the other hand, the Verrerie projectin Rouen boosted footfall in Saint Sever by 11%.

Occupancy Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019

Belgium 96.7% 96.8% 97.2% 95.8% 96.2%

Finland 96.4% 96.5% n.a. n.a n.a.

France 93.6% 93.7% 94.0% 92.2% 92.0%

Netherlands 96.8% 97.0% 97.1% 97.0% 97.2%

Shopping centres 96.1% 96.2% 96.3% 95.5% 95.6%

Offices (Belgium) 90.6% 90.6% 90.6% 88.9% 92.6%

Total portfolio 95.8% 95.9% 96.1% 95.2% 95.5%

Occupancy Cost Ratio* Q2 2018 Q4 2018 Q2 2019

Belgium 10.4% 10.8% 10.4%

France 13.4% 13.4% 13.1%

12.3% 12.2% 11.7%

The Occupancy Cost Ratio is defined as the ratio between 1) invoiced rents, including discounts, plus rentalcharges passed on to tenants, excluding taxes, for the past 12 months, and 2) the tenants’ revenues over thepast 12 months, excluding taxes, for the same tenant base, excluding supermarkets, hypermarkets and storesabove 750 sqm).

*

OPERATIONS


PROPERTY PORTFOLIO

Investment portfolioDuring the first half of 2019, in the Netherlands,Wereldhave acquired a C&A store in Tilburg for€ 11m and sold the former V&D department store inHoofddorp for € 7m to a residential propertydeveloper, at book value. This transaction is to becompleted during the second half of the year. InBelgium the leasehold was acquired of a food& beverage unit directly adjacent to the Kortrijk Ringshopping centre. Also in Belgium, a unit of the GenkShopping 1 shopping centre was acquired. The totalinvestments in Belgium amounted to € 3m. At June30, 2019, the value of the investment portfolioamounted to € 3,141.7m (December 31, 2018:€ 3,213.5m).

The Customer Journey project to upgrade theshopping centres is making good progress. In 2019,8 Play & Relax areas will be implemented and newrestrooms will be installed in 4 shopping centres.Wayfinding will be improved in 9 shopping centresand parking facilities are to be upgraded in 3 assetsin 2019. The capex involved for the year 2019 isestimated at € 5.0m, of which € 2.2m was spentduring the first half year.

Development pipelineAt June 30, 2019, Wereldhave’s developmentportfolio amounted to € 66m (December 31, 2018:€ 60m).

The committed development portfolio consists offour projects in the Netherlands and several smallerprojects across the portfolio.

In Dordrecht, agreement has been reached to createa new and larger unit to accommodate the Jumbosupermarket. The project is expected to becompleted in 2021.

In Capelle aan den IJssel, the second phase of theredevelopment of De Koperwiek was completed inJune 2019. The next phase includes a change in lay-out to accommodate an expansion for the Jumbosupermarket. The investment amounts to € 6m. Theapplication for a building permit has been filed.

In Arnhem, the refurbishment of the Presikhaafproject is progressing well. The refurbishment of thecentre is to be completed in the first quarter of 2020.

In Tilburg, the second phase of the inner cityredevelopment has started, with the partialdemolition of the Emmapassage. A new shoppingstreet will be created, to make the connection to theHeuvelstraat.

De Koperwiek, Capelle aan den IJssel


In Belgium, the refurbishment of smaller retail unitsdirectly opposite the Les Bastions retail park wascompleted during the second quarter. Theinvestment amounted to € 2m and the units are fullylet. The change in lay-out of the former Carrefour inthe Belle-Île shopping centre in Liège will becompleted during the third quarter. The investmentamounts to € 8m. A further expansion of the centre isbeing studied. Wereldhave Belgium is focusing onthe addition of more mixed-use elements, to evolveBelle-Île into a full-service concept that serves morepurposes than just shopping.

Good progress was made on the revitalisation ofMériadeck in Bordeaux. The Truffaut gardeningcentre will open its doors in November and theapplications for the permit to upgrade the food& beverage facilities will be filed in September.

(In €m)

Key DevelopmentsTotal

investment

Capex(net)

so far

Capexspent2019 YoC Prelet

Comple-tion

Committed

Koperwiek 38 30 5 5.0% 89% 2020

Presikhaaf 23 19 1 6.0% 78% 2020

Sterrenburg 14 3 1 5.6% 90% 2021

Tilburg 16 0 3 6.0% 6% 2021

Total 91 52 10

PROPERTY PORTFOLIO


RESULTS H1 2019

Total result € -59.3m (H1 2018: € 30.4mfrom continuing operations; € 29.0mincluding Finland)

•

Direct result € 65.8m (H1 2018: € 59.7 fromcontinuing operations; € 74.5m includingFinland)

•

Indirect result € -125.1m (H1 2018: € -29.3mfrom continuing operations; € -45.5mincluding Finland)

•

Direct result per share € 1.44 (H1 2018:€ 1.33 from continuing operations,€ 1.70 including Finland)

•

NAV per share (EPRA): € 40.90 (FY 2018:€ 43.82)

•

Loan-to-Value: 40.0% (FY 2018: 37.5%)•

Like-for-like shopping centres 0.8%(indexation 1.7%)

•

Total resultThe total result for the first half of 2019 amounts to€ -59.3m (H1 2018: € 29.0m). The decrease is largelydue to a lower indirect result compared to the firsthalf of 2018. The direct result decreased by 12% to€ 65.8m, mainly from the disposal of the Itisshopping centre in Finland. The indirect result forthe first half of 2019 was € -125.1m, against € -45.5min H1 2018. The total result per share amounted to€ -1.65 (H1 2018: € 0.54).

Direct resultThe direct result from continuing operations for thefirst semester stood at € 65.8m against € 59.7m in2018. The increase is partly due to the acquisition oftwo retail parks in Belgium in December 2018. Thedirect result for the first half of the year amounted to€ 65.8m against € 74.5m in 2018. This reflects a 12%decrease, almost fully attributable to the disposal ofthe Itis shopping centre. The direct result per shareamounted to € 1.44 (H1 2018: € 1.70).

Due to the ongoing focus on cost efficiency, generalcosts decreased by 12% from € 7.8m to € 6.9m inH1 2019 and interest costs decreased by 7% from€ 15.5m to € 14.4m.

Indirect resultThe indirect result consists of a negative propertyrevaluation of € 123.0m and a negative revaluationof financial instruments of € 2.1m. In Belgium,property values of shopping centres remained moreor less stable, with a depreciation of the Belgianoffices, resulting in an overall slight decrease of € 2mor 0.2% of the value of the portfolio. The Belgianinvestment market saw several shopping centres onoffer, with a broad variance in quality. Thetransaction of Woluwe’s second part was the latestreference in the shopping centre investment market.These yields are still significantly below the valuationyields for our portfolio.

In the Netherlands, there was a negative revaluationof € 84m, reflecting 5.7% of the value of theportfolio. The investment market for shoppingcentres in the Netherlands has remained slow.Investors are demanding higher returns for retail realestate. The revaluation is predominantly caused byexpanding yields on the portfolio. The effect is thatalthough our operations are relatively strong, theserising yields have resulted in the mark-down of theportfolio.


Since December 2018, there have been fivetransactions of convenience shopping centres thatsupport the revised yield levels. The average size ofthe shopping centres were smaller thanWereldhave’s average shopping centre size at ca.11,000 sqm. The average valuation yield for thesetransactions were recorded at 5.9% and € 3,250 persqm, which supports Wereldhave’s adjustedvaluation levels in the Netherlands.

In France, there was a negative revaluation of € 36m,or 4.1% of the value of the portfolio. The activity levelof the investment market for shopping centresremained low in the first six months of the year. Thelower property valuation is caused by lower marketrents and yield expansion.

The EPRA net initial yield as at June 30,2019 increased to 5.5% (December 31, 2018: 5.4%).

EquityAt June 30, 2019, Wereldhave’s stake in WereldhaveBelgium stood at 66.53%, against 65.90% at year-end 2018. The increase is the result of Wereldhave’schoice for a dividend in shares.

On June 30, 2019, shareholders’ equity amounted to€ 1,627.9m (December 31, 2018: € 1,744.5m). Thenet asset value per share (EPRA) including currentprofit stood at € 40.90 at June 30, 2019 (December31, 2018: € 43.82). The number of ordinary sharesin issue was unchanged at 40,270,921.

FinancingThe repayment of debt maturing in the first half of2019 (a € 56m in US Private Placements in Februaryand a € 250m convertible bond in May) was fundedby cash from the Itis disposal and by new drawingsunder revolving credit facilities. Interest-bearingdebt was € 1,316.5m at June 30, 2019 (December31, 2018: € 1,358.3m), which together with a cashbalance of € 26.4m (December 31, 2018: € 125.9m)gives a net debt of € 1,290.1m (December 31, 2018:€ 1,232.4m).

Undrawn borrowing capacity amounted to € 244mand the Loan-to-value ratio increased to 40.0%(2018: 37.5%) due to development capex andrevaluation of investment property. As at June 30,2019 the average cost of debt and ICR were 1.90%(2.08% YE 2018) and 6.5x (6.2x YE 2018)respectively. The weighted average term to maturityof interest-bearing debt was 4.4 years.

Dividend dates for the financial year 2019

ex-dividend #1 2019 July 30, 2019

Dividend record date July 31, 2019

Payment date dividend#1 2019

August 2, 2019

ex-dividend #2 2019 October 29, 2019

Dividend record date October 30, 2019


November 1, 2019

ex-dividend #3 2019 January 28, 2020

Dividend record date January 29, 2020


January 31, 2020

ex-dividend #4 Final2019

April 28, 2020

Dividend record date April 29, 2020


May 4, 2020

RESULTS H1 2019


OUTLOOK 2019

Outlook: direct result 2019 between€ 2.75 and € 2.80 per share (was:€ 2.75 – 2.85)

•

Dividend for 2019 confirmed at € 0.63 perquarter, or € 2.52 on an annual basis

•

Strategy Review: to be published with the FY2019 results.

•

Bankruptcies and restarting tenants will impact rentalgrowth during the second half of the year. The directresult for the year 2019 is expected to be between€ 2.75 and € 2.80 per share (previously:€ 2.75 – 2.85).

Dividend for 2019 is confirmed at a level of € 2.52,payable in four equal (interim) dividend payments of€ 0.63 per quarter.

At the EGM on July 9, 2019, Matthijs Storm wasappointed CEO, with effect from August 1, 2019.Herman van Everdingen, who acted as Interim CEOfrom February 1, 2019, will step down, but he willremain available to assist the Board of Managementin August.

During the second half of 2019. the Board ofManagement will review Wereldhave’s strategy, inclose consultation with the Supervisory Board. Theoutcome of this review is to be presented with thepublication of the FY 2019 results, on February 7,2020.

Schiphol, 26 July 2019

Wereldhave N.V. Board of Management

Herman van Everdingen, interim CEODennis de Vreede, CFO

Conference call / webcastWereldhave will present the results for the first halfyear of 2019 via a webcast and conference call at10.00 CEST, today. This webcast will be available athttps://www.wereldhave.com/.

For further informationRuud van MaanenE [email protected] + 31 20 702 78 43


ABOUT WERELDHAVE

Wereldhave invests in convenience shopping centres that are dominant in their micro environment in largerprovincial cities in Northwest continental Europe. The catchment area of our centres comprises of at least100,000 inhabitants within 10 minutes travel time. We focus on shopping centres that have a sound balancebetween shopping convenience and experience. With easy accessibility, an offer that covers 90% of shoppingneeds of goods and services, successful (inter) national and local retail formulas and strong food anchors, ourcentres provide convenience shopping to accommodate an ageing population, ongoing urbanisation anda busy lifestyle. We aim for attractive, immersive experiences that go beyond shopping, with fully embeddedfood & beverage functions, kid’s playgrounds and high-quality facilities, to attract families and prolong averageengagement times. For more information: www.wereldhave.com


DIRECT & INDIRECT RESULTfor the period ended June 30, 2019

(x € 1,000) Six months ended June 30, 2019 Six months ended June 30, 2018directresult

indirectresult

directresult

indirectresult

Gross rental income 102,860 - 96,739 -Service costs charged 15,162 - 13,450 -Total revenues 118,022 - 110,190 -Service costs paid -19,088 - -16,817 -Property expenses -11,571 - -9,846 -Total expenses -30,659 - -26,663 -

Net rental income 87,363 - 83,527 -

Valuation results - -122,951 - -26,656Results on disposals - -156 - -250General costs -6,921 -1,313 -7,775 -1,476Other income and expense - -27 - -169Operational result 80,442 -124,447 75,752 -28,551Interest charges -14,465 - -15,589 -Interest income 18 - 48 -Net interest -14,447 - -15,540 -Other financial income and expense - -2,089 - -1,428Result before tax 65,995 -126,535 60,212 -29,979Income tax -188 974 -530 710Result from continuing operations 65,807 -125,561 59,682 -29,269

Result from discontinued operations - 413 14,838 -16,264Result 65,807 -125,148 74,520 -45,534Profit attributable to:Shareholders 57,857 -124,351 68,482 -46,730Non-controlling interest 7,950 -797 6,038 1,196Result 65,807 -125,148 74,520 -45,534

Earnings per share from continuing operations (€) 1.44 -3.10 1.33 -0.75Earnings per share from discontinued operations (€) - 0.01 0.37 -0.41Earnings per share (€) 1.44 -3.09 1.70 -1.16


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITIONat June 30, 2019

(x € 1,000)Assets Note June 30, 2019 December 31, 2018Non-current assetsInvestment property in operation 3,141,708 3,213,454Lease incentives 6,854 6,754Investment property under construction 66,072 59,999Investment property 5 3,214,633 3,280,207Property and equipment 6,899 2,120Intangible assets 720 897Derivative financial instruments 30,762 27,245Other financial assets 784 717Total non-current assets 3,253,799 3,311,185Current assetsTrade and other receivables 57,525 52,697Tax receivables 8,071 13,693Cash and cash equivalents 26,426 125,925Total current assets 92,021 192,314Investments held for sale 6,940 6,940Total assets 3,352,760 3,510,440Equity and LiabilitiesEquityShare capital 6 40,271 40,271Share premium 1,711,033 1,711,033Reserves -123,363 -6,815Attributable to shareholders 1,627,941 1,744,489Non-controlling interest 228,114 231,347Total equity 1,856,055 1,975,836Non-current liabilitiesInterest bearing liabilities 7 1,209,532 1,019,151Deferred tax liabilities 6,393 6,648Derivative financial instruments 36,796 36,421Other long term liabilities 35,383 14,774Total non-current liabilities 1,288,104 1,076,994Current liabilitiesTrade payables 5,461 8,529Tax payable 6,576 11,651Interest bearing liabilities 7 107,000 339,167Other short term liabilities 89,565 96,031Derivative financial instruments - 2,230Total current liabilities 208,602 457,610Total equity and liabilities 3,352,760 3,510,440


CONDENSED CONSOLIDATED INCOME STATEMENTfor the period ended June 30, 2019

(x € 1,000)Note June 30, 2019 June 30, 2018

Gross rental income 102,860 96,739Service costs charged 15,162 13,450Total revenue 118,022 110,190Service costs paid -19,088 -16,817Property expenses -11,571 -9,846Net rental income 10 87,363 83,527Valuation results -122,951 -26,656Results on disposals -156 -250General costs -8,234 -9,251Other income and expense -27 -169Operating result -44,004 47,201Interest charges -14,465 -15,589Interest income 18 48Net interest -14,447 -15,541Other financial income and expense -2,089 -1,428Result before tax -60,540 30,232Income tax 786 180Result from continuing operations -59,754 30,412

Result from discontinued operations 413 -1,426

Result for the year -59,341 28,986Result attributable to:Shareholders -66,495 21,752Non-controlling interest 7,154 7,234Result for the year -59,341 28,986

Basic earnings per share from continuing operations (€) -1.66 0.58Diluted earnings per share from continuing operations (€) -1.66 0.58Basic and diluted earnings per share from discontinued operations (€) 0.01 -0.04Basic earnings per share (€) -1.65 0.54Diluted earnings per share (€) -1.65 0.54


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEfor the period ended June 30, 2019

(x € 1,000)Six months ended June

30, 2019Six months ended June

30, 2018Result from continuing operations -59,754 30,412Result from discontinued operations 413 -1,426Result -59,341 28,986

Items that may be recycled to the income statement subsequentlyEffective portion of change in fair value of cash flow hedges -636 -6,744Changes in fair value of cost of hedging 693 1,683

Total comprehensive income -59,284 23,925

Attributable to:Shareholders -66,384 16,639Non-controlling interest 7,100 7,286

-59,284 23,925

Total comprehensive income attributable to shareholders arises from:Continuing operations -66,797 18,065Discontinued operations 413 -1,426

-66,384 16,639


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the period ended June 30, 2019

(x € 1,000) Attributable to shareholders

Sharecapital

Sharepremium

Generalreserve

Hedgereserve

Cost ofhedgingreserve

Totalattributable

to share-holders

Non-controlling

interest Total equityBalance at January 1, 2018 40,271 1,711,033 186,071 -4,847 -4,366 1,928,162 188,351 2,116,513Comprehensive incomeResult - - 21,752 - - 21,752 7,234 28,986Effective portion of change in fair valueof cash flow hedges - - - -6,796 - -6,796 52 -6,744Changes in fair value of cost of hedging - - - - 1,683 1,683 - 1,683Total comprehensive income - - 21,752 -6,796 1,683 16,639 7,286 23,925

Transactions with shareholdersShares for remuneration - - 202 - - 202 - 202Dividend - - -62,016 - - -62,016 -4,598 -66,614Change non-controlling interest - - -224 - - -224 1,504 1,280Other - - -301 - - -301 15 -286Balance at June 30, 2018 40,271 1,711,033 145,484 -11,643 -2,683 1,882,462 192,558 2,075,020

Balance at January 1, 2019 40,271 1,711,033 4,495 -9,605 -1,706 1,744,489 231,347 1,975,835Comprehensive incomeResult - - -66,495 - - -66,495 7,154 -59,341Effective portion of change in fair valueof cash flow hedges - - - -582 - -582 -54 -636Changes in fair value of cost of hedging - - - - 693 693 - 693Total comprehensive income - - -66,495 -582 693 -66,384 7,100 -59,284

Transactions with shareholdersShares for remuneration - - 318 - - 318 - 318Dividend - - -50,740 - -50,740 -5,947 -56,687Change non-controlling interest - - 276 - 276 -4,386 -4,110Other - - -18 - - -18 - -18Balance at June 30, 2019 40,271 1,711,033 -112,164 -10,187 -1,013 1,627,941 228,114 1,856,055


CONDENSED CONSOLIDATED CASH FLOW STATEMENTfor the period ended June 30, 2019

(x € 1,000)

NoteSix months ended June

30, 2019Six months ended June

30, 2018Operating activitiesResult -59,341 28,986Adjustments:Valuation results 122,951 44,918Net interest 14,447 15,533Other financial income and expense 2,089 1,428Results on disposals -257 250Deferred tax -974 -3,861Amortisation 773 424Movements in working capital -14,692 -1,027Cash flow generated from operations 64,996 86,651Interest paid -12,894 -13,536Interest received 18 37Income tax paid -904 -689Cash flow from operating activities 51,216 72,463

Investment activitiesProceeds from disposals direct investment properties -156 12,450Proceeds from disposals indirect investment property -2,318 -Investments in investment property -41,569 -80,522Investments in equipment -142 -332Investments in financial assets -68 32Investments in intangible assets -37 -79Cash flow from investing activities -44,290 -68,451

Financing activitiesProceeds from interest bearing debts 7 261,760 93,316Repayment interest bearing debts 7 -312,317 -36,416Proceeds of other long-term liabilities 500 402Other movements in reserve 319 -Transactions non-controlling interest - 4,241Dividend paid -56,687 -66,614Cash flow from financing activities -106,425 -5,071

Increase/decrease in cash and cash equivalents -99,499 -1,059Cash and cash equivalents at January 1 125,925 13,585Cash and cash equivalents at June 30 26,426 12,526


NOTES TO THE CONDENSED CONSOLIDATED INTERIMFINANCIAL STATEMENTS

REPORTING ENTITY1.Wereldhave N.V. (‘the Company’) is an investment company which invests in realestate (shopping centres and offices). The property portfolio of Wereldhave N.V.and its subsidiaries (‘the Group’) is located in Belgium, France and theNetherlands. The Group is principally involved in leasing investment propertyunder operating leases. The property management is performed by Groupmanagement companies. The Company is a limited liability companyincorporated and domiciled in the Netherlands. The address of the Company’sregistered office is Schiphol Boulevard 233, 1118 BH Schiphol. The shares of theCompany are listed on the Euronext Stock Exchange of Amsterdam. Thesecondensed consolidated interim financial statements for the period ended June30, 2019 were approved for issue on July 25, 2019. The figures of this pressrelease are unaudited.

TAX STATUS2.Wereldhave N.V. has the tax status of an investment company (FBI status) inaccordance with section 28 of the Dutch 'Wet op de Vennootschapsbelasting1969'. This status assumes that the Group is (almost) exclusively engaged inportfolio investment activities. As a consequence, corporation tax is due at a rateof 0% in the Netherlands, provided that certain conditions are met. The mainconditions concern the requirement to distribute the taxable result as dividendand restrictions with regard to the leverage. The taxable result of Wereldhave N.V.must be distributed as a dividend to its shareholders within eight months after theyear during which the result was made. In general terms, the leverage restrictionsimply that investments in real estate (including qualifying real estate companies)may only be financed through debt up to a maximum of 60% of their value. Forinvestments in other assets the maximum level of debt allowed is only 20%. Thereis no requirement to include capital gains, arising on disposal of investments, inthe result to be distributed.

The subsidiaries in Belgium (OGVV status) and France (SIIC status) have a similarstatus. Subsidiaries in Finland are subject to corporation tax. In Belgium the netvalue of one single asset may not exceed 20% of the total Belgium portfolio.A concession was granted by the FSMA for a maximum period of 2 years expiringDecember 31, 2020. At June 30, 2019, the net value of Belle-Ile was below thethreshold of 20%.


ACCOUNTING POLICIES3.The principal accounting policies applied in the preparation of these condensedconsolidated interim financial statements for the period ended June 30, 2019 areset out below. These policies have been consistently applied to all yearspresented, unless otherwise stated.

Basis of accounting3.1

Statement of complianceThis condensed consolidated interim financial information for the six monthsended June 30, 2019 has been prepared in accordance with IAS 34 InterimFinancial Reporting. The condensed consolidated interim financial informationshould be read in conjunction with the financial statements for the year endedDecember 31, 2018, which have been prepared in in accordance with theInternational Financial Reporting Standards (IFRS) as adopted by the EuropeanUnion (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.

Income and cash flow statementThe Group presents a separate ‘statement of profit or loss’ and ‘othercomprehensive income’.

The Group reports cash flows from operating activities using the indirect method.Interest received and interest paid is presented within operating cash flows. Theacquisitions of investment properties are disclosed as cash flows from investingactivities as this most appropriately reflects the Group’s business activities.

Preparation of the condensed consolidated interim financial statementsThese condensed consolidated interim financial statements for the period endedJune 30, 2019 have been prepared on a going concern basis, applying a historicalcost convention, except for the measurement of investment property andderivative financial instruments that have been measured at fair value.

The preparation of these condensed consolidated interim financial statements forthe period ended June 30, 2019 in conformity with EU-IFRS requires the use ofcertain critical accounting estimates. It also requires management to exercise itsjudgement in the process of applying the Group’s accounting policies. Changes inassumptions may have a significant impact on the condensed consolidatedinterim financial statements in the period the assumptions changed. Managementbelieves that the underlying assumptions are appropriate.

Change in accounting policy and disclosures

New and amended standards adopted by the GroupExcept as described below, the accounting policies applied are consistent withthose of the annual financial statements for the year ended December 31, 2018.

IFRS 16Wereldhave adopted IFRS 16, ‘Leases’ from January 1, 2019. IFRS 16 replacesexisting leases guidance including IAS 17 Leases, IFRIC 4 Determining whether anarrangement contains a Lease, SIC-15 Operating Leases—Incentives andSIC-27 Evaluating the Substance of Transactions Involving the Legal Form ofa Lease. The standard sets out the principles for the recognition, measurement,presentation and disclosure of leases and requires lessees to account for mostleases under a single on-balance sheet model.


Classification and MeasurementThe Group as a lesseeA right-of-use asset and a lease liability is recognised at the lease commencementdate. The right-of-use asset is initially measured at cost and subsequently at costless any accumulated depreciation, impairment losses and adjusted for certainremeasurements of the lease liability. Right-of-use assets are presented underproperty and equipment. Right-of-use assets that meet the definition ofinvestment property are presented under investment property and subsequentlymeasured at fair value in accordance with the Group’s accounting policies.

The lease liability is initially measured at the present value of the lease paymentsthat are not paid at commencement date which are discounted using the Group’sincremental borrowing rate, unless the interest rate implicit in the lease isavailable. The lease liability is subsequently increased by the interest costs on thelease liability and decreased by any lease payments made. Lease liabilities areremeasured when there is a change in future lease payments arising froma change in an index or changes to the assessment whether a purchase orextension options is reasonably certain to be exercised. Judgement may need tobe applied to determine the lease term for some lease contracts that containrenewal or termination options. The assessment may significantly affect theamount of lease liabilities and right-of-use assets recognised.

For the transition at January 1, 2019 the Group accounted for its leaseholdcontracts, office and car leases under IFRS 16 using the modified retrospectiveapproach. As permitted under the specific transitional provisions, the2018 comparative information is not restated. On adoption of IFRS 16 Wereldhaveelected to use the transition practical expedient to recognise only lease liabilitiesin relation to leases which had previously been classified as operating leasesunder the principles of IAS 17. Therefore, the definition of a lease under IFRS16 has only been applied to contracts entered into or changed on or after January1, 2019. Wereldhave elected to use the recognition exemptions for leases witha lease term of 12 months or less at date of initial application and lease contractsfor which the underlying asset is of low value.

Lease liabilities were measured at the present value of the remaining leasepayments and discounted using the incremental borrowing rate as of January 1,2019. The weighted average rate applied is 5%. Lease liabilities are included inother long-term liabilities in the statement of financial position.

Right-of-use assets were measured at the amount equal to the lease liability andadjusted by the amount of any prepaid or accrued lease payments relating to thatlease recognised in the balance sheet at December 31, 2018.

The impact of the transition to IFRS 16 is summarised below.

(x € 1,000)

AssetsJanuary 1,

2019Investment property 16,050Property and equipment 5,180Total right-of-use assets recognised under IFRS 16 21,230

LiabilitiesJanuary 1,

2019Other long-term liabilities 21,230Total lease liabilities recognised under IFRS 16 21,230

Operating lease commitments at December 31, 2018 85,518

Discounted using the incremental borrowing rate at January 1, 2019 21,230Lease liabilities recognised at January 1, 2019 21,230


For leases under IFRS 16 the Group recognised depreciation and interests costsinstead of operating lease expenses. For the six months ended June 30, 2019 theGroup recognised depreciation charges of € 0.4m and interest costs of € 0.5m. Nodepreciation is recognised for right-of-use assets that meet the definition ofinvestment property. Payments of lease liabilities are presented as cash flows fromfinancing activities in the cash flow statement.

The Group as a lessorIFRS 16 did not result in any changes to the accounting of leases whereWereldhave acts as the lessor.

New standards and interpretations not yet adoptedA number of new standards and amendments to standards and interpretations areeffective for annual periods beginning after January 1, 2019, but do not have animpact on these interim condensed consolidated financial statements.

Consolidation3.2

Changes in ownership interests in subsidiaries without change of controlAs result of the election to receive stock dividend from Wereldhave Belgium theGroup’s stake in Wereldhave Belgium changed to 66.53% at June 30, 2019 (year-end 2018: 65.90%).


SEGMENT INFORMATION4.Geographical segment information – the period ended June 30, 2019

(x € 1,000)Result Belgium Finland France Netherlands Headoffice TotalGross rental income 30,053 - 26,216 46,591 - 102,860Service costs charged 4,806 - 6,184 4,171 - 15,162Total revenue 34,860 - 32,400 50,762 - 118,022Service costs paid -6,057 - -8,223 -4,808 - -19,088Property expenses -1,537 - -3,956 -6,079 - -11,571Net rental income 27,266 - 20,222 39,876 - 87,363Valuation results -2,473 - -36,058 -84,420 - -122,951Results on disposals -19 - -6 -131 - -156General costs -1,813 - -2,060 -1,319 -3,043 -8,234Other income and expense - - -2 - -25 -27Operating result 22,962 - -17,904 -45,994 -3,068 -44,004Interest charges -1,438 - -7,915 -10,244 5,132 -14,465Interest income 9 - - 5 3 18Other financial income and expense -664 - - - -1,425 -2,089Income tax 214 - 30 543 - 786Result from continuing operations 21,083 - -25,789 -55,690 642 -59,754

Result from discontinued operations - 413 - - - 413Result 21,083 413 -25,789 -55,690 642 -59,341

Total assets at June 30, 2019Investment properties in operation 957,341 - 849,049 1,335,318 - 3,141,708Investment properties under construction 12,165 - - 53,907 - 66,072Assets held for sale - - - 6,940 - 6,940Other segment assets 32,478 - 55,438 324,002 1,148,241 1,560,159minus: intercompany -10,033 - - -65,000 -1,347,085 -1,422,118

991,950 - 904,487 1,655,167 -198,844 3,352,760

Investments six months ended June 30, 2019 6,546 - 7,461 13,024 - 27,031

Gross rental income by type of propertyShopping centres 22,182 - 26,216 46,591 - 94,989Offices 7,871 - - - - 7,871

30,053 - 26,216 46,591 - 102,860


Geographical segment information – the period ended June 30, 2018

(x € 1,000)Result Belgium Finland France Netherlands Headoffice TotalGross rental income 25,574 - 24,866 46,300 - 96,739Service costs charged 4,450 - 5,003 3,997 - 13,450Total revenue 30,024 - 29,869 50,296 - 110,190Service costs paid -5,375 - -6,860 -4,582 - -16,817Property expenses -1,203 - -2,565 -6,078 - -9,846Net rental income 23,446 - 20,445 39,636 - 83,527Valuation results 3,341 - -4,134 -25,863 - -26,656Results on disposals - - -2 -249 - -250General costs -1,821 - -1,797 -944 -4,689 -9,251Other income and expense 8 - - - -176 -169Operating result 24,974 - 14,512 12,580 -4,866 47,201Interest charges -1,293 - -7,582 -9,810 3,096 -15,589Interest income 34 - - 14 - 48Other financial income and expense - - - - -1,428 -1,428Income tax -53 - -175 408 - 180Result from continuing operations 23,663 - 6,755 3,192 -3,198 30,412

-Result from discontinued operations - -1,426 - - - -1,426Result 23,663 -1,426 6,755 3,192 -3,198 28,986

Total assets at December 31, 2018Investment properties in operation 940,584 - 877,646 1,395,224 - 3,213,454Investment properties under construction 14,692 - - 45,307 - 59,999Assets held for sale - - - 6,940 - 6,940Other segment assets 35,712 - 37,410 308,617 1,411,925 1,793,664minus: intercompany -10,532 - - -65,000 -1,488,085 -1,563,617

980,456 - 915,056 1,691,088 -76,160 3,510,440

Investments six months ended June 30, 2018 26,012 10,302 14,598 30,726 - 81,638

Gross rental income by type of propertyShopping centres 21,475 - 24,866 46,300 - 92,640Offices 4,099 - - - - 4,099

25,574 - 24,866 46,300 - 96,739


INVESTMENT PROPERTY5.(x € 1,000) 2019

Investment propertyin operation Lease incentives

Investment propertyunder construction

Total Investmentproperty

Balance at January 1 3,213,454 6,754 59,999 3,280,207Purchases 14,195 - - 14,195Investments 11,350 - 15,681 27,031From / to development properties 9,805 - -9,805 -To / from investments held for sale - - - -Valuations -123,146 - 197 -122,949Right-of-use assets recognised (IFRS 16) 16,050 - - 16,050Other - 100 - 100Balance at June 30 3,141,708 6,854 66,072 3,214,633

(x € 1,000) 2018Investment property

in operation Lease incentivesInvestment property

under constructionTotal Investment

propertyBalance at January 1 3,643,322 8,014 122,361 3,773,697Purchases - - - -Investments 33,549 - 48,089 81,638From / to development properties 108,780 - -108,780 -To investments held for sale -18,370 - - -18,370Valuations -40,164 - -4,753 -44,917Other - 1,310 - 1,310Balance at June 30 3,727,117 9,324 56,917 3,793,358

Investment property in operationIn H1 2019 Wereldhave acquired a C&A store in Tilburg for € 11m and a part ofthe leasehold in Kortrijk for € 3m.

Fair valueIn total 99.8% (2018: 99.8%) of the total property portfolio was measured at fairvalue. The assets in the Group and its subsidiaries mainly consists of the propertyportfolio. The market value of these assets cannot be assessed using officialquotations or listings.


A valuation based on fair value is a time- and location based estimate. Theestimate is based on the price level on which two well-informed parties undernormal market conditions would make a transaction for that specific property onthe date of valuation. The fair value of a property in the market can only bedetermined accurately at the moment of the actual sale of the property.

Twice a year (June 30 and December 31) the properties are valued by externalvaluers. The valuer appraises at fair value with his own market knowledge andinformation. The valuation is prepared by the valuer and verified and approved byWereldhave.

The fair value is based on a net yield calculation, where market rents arecapitalised. Elements of this calculation include current and future rent levels,expected vacancy rates, rent indexations, turnover rents, lease incentives, etc. Theyields and market rents used are specific for the country, the location, the type ofproperty, the level of maintenance and the general rent ability of every singleproperty. The determination of applicable yields is based upon comparabletransactions, supplemented with market and building specific knowledge andremaining other assumptions, in which the professional judgment of the valuer willbecome more important if the available transaction information is not sufficient.

Apart from assumptions with respect to yields, costs for future maintenanceinvestments are also taken into account in the valuation. Furthermore, explicitassumptions are made per lettable location and per tenant with regard to(re)letting, the start date of such (re)letting and the costs related thereto. Also,adjustments are made for expected costs of vacancy (present and future) and fordifferences between the market rent and contractual rent. Sales costs at theexpense of the buyer, including transfer tax payable, are deducted from themarket value.

Investment properties in operationThe significant assumptions used relating to valuations are set out below. Theportfolio is appraised every six months.

June 30, 2019 Belgium France NetherlandsTotal market rent per sqm (€) 207 237 226EPRA Net Initial Yield 5.7% 4.8% 5.8%EPRA vacancy rate 4.3% 8.0% 2.8%Average vacancy period (in months) 6-12 9 7Bandwith vacancy (in months) 0-21 6-12 5-13

EPRA Net Initial YieldThe EPRA Net Initial Yield is calculated by annualised rental income based on cashrents passing at the balance sheet date, less non-recoverable property operatingexpenses, divided by the market value of the property, including estimatedpurchasers' cost. The total average EPRA Net Initial Yield amounts to 5.5% (year-end 2018: 5.4%).

A change in yield with 0.25% results in a change of approximately € 127m inequity and result (€ 3.15 per share). A 5% drop of the estimated market rent,assuming stable yields, has a negative impact on shareholders’ equity and resultof approximately € 157m (€ 3.90 per share).


NET ASSET VALUE PER SHARE6.The authorised capital comprises 75,000,000 million shares each with a nominalvalue of € 1. As at June 30, 2019, 40,270,921 ordinary shares were issued.

the periodended June

30, 2019

the periodended

December31, 2018

Equity available for shareholders (x € 1,000) 1,627,941 1,744,489

Number of ordinary shares per 30 June 40,270,921 40,270,921Purchased shares for remuneration -14,729 -27,927Number of ordinary shares per 30 June for calculation net asset value 40,256,192 40,242,994

Net asset value per share (x € 1) 40.44 43.35

INTEREST BEARING LIABILITIES7.(x € 1,000)

June 30, 2019 December 31, 2018Long termBank loans 469,820 283,835Private placement 730,286 725,936EMTN 9,426 9,380

1,209,532 1,019,151Short termBank loans 9,000 -Private placement - 55,616Treasury notes 98,000 35,000Convertible bonds - 248,551

107,000 339,167Total interest bearing liabilities 1,316,532 1,358,318

(x € 1,000)

June 30, 2019 December 31, 2018Balance at January 1 1,358,318 1,557,658New funding 261,760 35,996Repayments -312,317 -247,819Use of effective interest method 723 1,474Effect of fair value hedges 2,181 531Exchange rate differences 5,867 10,478Balance at December 31 1,316,532 1,358,318

The carrying amount and fair value of long term interest bearing debt is as follows:

(x € 1,000) June 30, 2019 December 31, 2018carryingamount fair value

carryingamount fair value

Bank loans, private placement andEMTN 1,209,532 1,251,506 1,019,151 1,056,633Total 1,209,532 1,251,506 1,019,151 1,056,633


FAIR VALUE MEASUREMENT8.The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities:

(x € 1,000) Fair value measurement usingQuoted

pricesObservable

inputUnobservable

inputJune 30, 2019 Total Level 1 Level 2 Level 3Assets measured at fair valueInvestment property in operation 3,148,562 - - 3,148,562Investment property under construction 59,781 - - 59,781Investments held for sale 6,940 - - 6,940

Financial assetsDerivative financial instruments 30,762 - 30,762 -

Liabilities for which the fair value has been disclosedInterest bearing debt 1,358,506 - 1,358,506 -Derivative financial instruments 36,796 - 36,796 -

Quotedprices

Observableinput

Unobservableinput

December 31, 2018 Total Level 1 Level 2 Level 3Assets measured at fair valueInvestment property in operation 3,220,208 - - 3,220,208Investment property under construction 51,074 - - 51,074Investments held for sale 6,940 - - 6,940

Financial assetsDerivative financial instruments 27,245 - 27,245 -

Liabilities for which the fair value has been disclosedInterest bearing debt 1,398,692 251,443 1,147,249 -Derivative financial instruments 38,651 - 38,651 -


Wereldhave categorizes its financial instruments measured at fair value in threehierarchies of inputs to valuation techniques used to measure fair value.Level 1 inputs are based on quoted prices, level 2 inputs are inputs other thanquoted prices included in level 1 that are observable for the asset or liability,either direct or indirectly. Level 3 inputs are unobservable inputs for the asset orliability.

There were no transfers between levels during the year under review.

OFF BALANCE SHEET ASSETS AND LIABILITIES9.The Group has contracted capital commitments for an amount of € 16m (YE 2018:€ 11m) with regard to investment properties under construction. As of June 30,2019 the Group has not issued guarantees to third parties (2018: € 34m).

RENTAL INCOME BY COUNTRY10.

(x € 1,000) Gross rental income

Property expenses,service costs andoperating costs Net rental income

Six monthsended June

30, 2019


30, 2018


30, 2019


30, 2018


30, 2019


30, 2018Belgium 30,053 25,574 2,787 2,128 27,266 23,446France 26,216 24,866 5,994 4,421 20,222 20,444The Netherlands 46,591 46,300 6,715 6,664 39,876 39,636Total 102,860 96,739 15,497 13,212 87,363 83,527


RELATED PARTIES11.The Board of Management, the Supervisory Board and subsidiaries of WereldhaveN.V. are considered to be related parties. The members of the Supervisory Boardand of the Board of Management had no personal interest in any of theCompany's investments during the year.

Related party transactions were made on terms equivalent to those that prevail inarm’s length transactions if such terms can be substantiated.

EVENTS AFTER BALANCE SHEET DATE12.In the Extraordinary Meeting of Shareholders held on July 9, 2019, Matthijs Stormwas appointed as Chief Executive Officer (CEO) with effect from August 1, 2019.

DECLARATION OF THE BOARD OFMANAGEMENT

13.

The Board of management of Wereldhave N.V., consisting of H.J. van Everdingenand A.W. de Vreede, hereby declares that, to the best of their knowledge:

1. the interim financial statement over the first half year of 2019 gives a true andfair view of the assets, liabilities, financial position and result of Wereldhave N.V.and the companies included in the consolidation as a whole;

2. the interim financial statement over the first half year of 2019 provides a trueand fair view on the condition as at the balance sheet date and the course ofbusiness during the half year under review of Wereldhave N.V. and the relatedcompanies of which the data have been included in the interim statement, and theexpected course of business, where, in as far as important interest do not oppose,particular attention is paid to the investments and the conditions of which thedevelopment of turnover and profitability depend; and

3. the interim financial statement over the first half year of 2019 includes a trueand fair review of the information required pursuant to section 5:25d, subsections8 and 9 of the Dutch Financial Markets Supervision Act (Wet op het financieeltoezicht).

Wereldhave considers the market risk, liquidity risk and credit risk as financialrisks. The market risk can be divided into interest risk and currency risk. Rapidlychanging economic environments and uncertainty about the solidity of theEuro(zone) may affect the market circumstances, and thus both the lettingprospects as well as the market value of the properties. The continuation of theEuro(zone) is assumed. For further comments we refer to the annual report 2018.Our risks are being monitored on a continuous basis.

Schiphol, 26 July 2019

Board of managementHerman van Everdingen, interim CEODennis de Vreede, CFO


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